*JEFFERIES RAISES AVIVA PRICE TARGET TO 560 (550) PENCE - 'BUY' |
That’s a good position to be in! Nicely done |
Rightly or wrongly, I've sold out of av. today and kept my dlg.
I think the risk is currently with av.
And if nothing else, I'll get some av shares again next year in any case :-) |
I'd agree, but they're looking for more acquisitions, which will need funding.I do not see dividends going higher, I see capital growth. |
I have no doubt that buybacks are off the table for the next two to three years given the use of capital to finance the acquisition. That said, given that EPS is set to get a double digit uplift post the acquisition I do not see any reason to expect the dividend per share to not continue to grow. |
Thanks - some interesting reading. |
Aviva boss Amanda Blanc seeks more takeover targets after Direct Line deal
Can the Aviva share price smash it again next year? The experts have spoken |
The article mentioned in post 20457 :-
. |
Cardinal, the good bit is 18 months or so away, for now it means diddly squat. A pay now (lower share price) reap later (bigger dividend).They have overpaid in my opinion; they played nicely. All this, and the CMA can stick their oar in when it goes to them.Don't get me wrong, the BOD had to do something as the sediment was starting to settle, plus there's further reporting that they are open to more acquisitions.Patience. |
The basic question for me is how will I, as an AV shareholder, benefit from this takeover. Cost synergies will presumably be spelled out in the prospectus but what about the risk to the dividend a long drawn out CMA review and possibility of rejection due to market share.
As of now I am not convinced. |
The basic question for me is how will I, as an AV shareholder, benefit from this takeover. Cost synergies will presumably be spelled out in the prospectus but what about the risk to the dividend a long drawn out CMA review and possibility of rejection due to market share.
As of now I am not convinced. |
Cross selling opportunities are overrated usually driven by the marketing dept. The key in motor will be a continual focus on cost reduction. If they just by the book and kill off the rest then this could be a good deal. |
Sunday Times "Drivers on hold in mega merger" " Dial M for Merger"
Argues pro's and con's of the deal. 2 pages. Reads good .
"Direct line is over manned.Too many HR, too many managers"
On the question of will quotes get higher with less competition " it can be argued with cost cutting and stream lining , with greater scale they'll be even more competitive"
On the question of government claiming profiteering.
Industry says " every £1.13p paid out in claims and expenses insurers received just £1 in premiums"
Begs the question as to why our Dame wants to buy DLG. |
The Aviva-Direct Line deal will face scrutiny by the Competition and Markets Authority (CMA) amid justified concern that the presence of much bigger beast in the marketplace could mean higher premiums.
There is confidence at Aviva that it can demonstrate to the CMA that there is already ferocious competition in the markets for motor and home insurance.
When examined on a segmented basis, such as EVs, women and younger motorists, there should be no problem. But caution is called for. |
How Aviva won Direct Line in eight days |
Because I’d anticipate the buyback (which was the driver in facilitating the dividend growth through a reduced share count) being cut back or even put on hold in order to pay in part for the DLG acquisition.
spud |
Why would you say almost certainly? The deal is going to be high single digit percent accretive to earnings and AV can cross sell to the 9m customers that DLG has which will unlock revenue synergies to complement the obvious cost synergies. I blogged about my own thoughts on the deal yesterday - https://tbifund.wordpress.com/2024/12/06/stocks-update-6-12-2024/ |
If it’s seen as ‘pushing the limits of good value’ we can exclude alternative bids popping up.
If it’s seen as strategic jackpot then (hopefully)we will see that reflected in SP |
"For Aviva, the price is pushing the limit of good value but snapping up Direct Line could be a strategic jackpot," says Britzman.http://stocks.apple.com/AkxgXts_gT_CbIobHmzZwzAspud |
Motor is a commodity business, where size and the leverage it provides on costs enables cost leadership over time. Strategically they are nailing their colours to the mast, we must hope we have the management in place who will continually have an absolute focus on costs, it is a discipline that Insurers generally have not been particularity good at. |
If you are saying, AV have overpaid ... and the dividend growth strategy is at risk...
then Amanda Blanc needs to go. |
SteMiS, easy arbitrage trade if you're willing to risk it. |
Almost certainly imo. spud |
I think there is a way to go before I consider my next move. There are some points that need clarifying from the future share price after purchase complete together with the divi strategy. This was forecast to grow single mid % digits for 2024.. will that now be at risk ? |
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